EXCLUSIVE: Deal for sea-to-lake Clark estate could be valued at $90 million or more, sources say

Darrell Hofheinz @PBDN_hofheinz

Sunday

Nov 11, 2018 at 1:54 PMNov 15, 2018 at 10:08 AM

Longtime Palm Beachers Kathryn and Leo A. Vecellio Jr. have a new home in Palm Beach and it’s a whopper — landmarked Il Palmetto, the 5-acre ocean-to-lake estate Netscape co-founder James H. Clark had listed for sale until last spring at $95 million.

The value of the hush-hush, off-market deal — orchestrated by broker Lawrence Moens of Lawrence A. Moens Associates — is said to have approached or exceeded $90 million, according to sources interviewed by the Daily News. But the deal missed the $95 million record that has stood for more than a decade for a single real estate transaction in Palm Beach, sources said.

Even so, the price range would make the Il Palmetto deal the second-highest-dollar single seller/single buyer transaction in the town’s history. And it would certainly mark the biggest-dollar residential deal in Palm Beach this year.

Leo Vecellio declined to speak with the Daily News, and Clark and Moens couldn’t be reached.

Whatever might have transpired this year at Il Palmetto on the stretch of coastal road known as Billionaires Row, records at the Palm Beach County Courthouse offer no details about dollar amounts or terms between Clark and the Vecellios.

But there are clues, gleaned from public records and from sources who know the Vecellios but didn’t want to be identified.

Beginning last spring, courthouse filings document simultaneous transfers of ownership at Il Palmetto and of a house the Vecellios bought nearly five years ago at 120 Jungle Road in the Estate Section. Late last month, a mortgage recorded at just under $70 million was issued on Il Palmetto to its new ownership company.

And most telling, on the same day the mortgage was signed, the Vecellios signed a 99-year lease for Il Palmetto. The length of the lease meets the criteria to let them transfer their existing homestead exemption, according to the Palm Beach County Property Appraiser’s Office.

One real estate attorney who reviewed the documents told the Daily News that such long-term leases can be used by families for internal estate planning purposes.

Meanwhile across town on Jungle Road, Moens listed the main house for sale at just under $30 million last month, according to records in the Palm Beach Board of Realtors Multiple Listing Service.

Clark had been trying to sell his estate since at least 2016, first through Sotheby’s International Realty, which initially set an off-market, jaw-dropping price tag of $137 million (and later reduced to $115 million in the MLS).

The property was last listed in January this year at $95 million by Moens — but by April 5, Moens had withdrawn his listing from the local MLS, records show.

Under MLS rules, real estate brokers and agents whose properties are listed when they sell must update those listings with a sales price once the sale closes. But by withdrawing the listing, no sale or sales price need ever be recorded in MLS, even if the broker or agent is still involved when the property changes hands. Il Palmetto has never re-entered the MLS.

There also have been sightings over the past several months of moving trucks at Il Palmetto and at the house on Jungle Road in the Estate Section.

Fatio’s masterpiece

Il Palmetto, completed in 1930 with architecture inspired by Genoa and Venice, is among the most prominent estates in Palm Beach. The town granted the house landmark status in 1980, protecting it from major alternations unless the town approves.

The property has 340 feet of beachfront east of South Ocean Boulevard, with another 360 feet on the Intracoastal Waterway. Nearly a mile south of Trump’s Mar-a-Lago, Il Palmetto sits where the coastal road makes a sharp turn at Widener’s Curve. The curve is named for Philadelphia industrialist Joseph Widener, who built the house.

In all, Il Palmetto’s house and outbuildings have 68,831 square feet of living space, inside and out, according to real estate listings. Considered Swiss-born society architect Maurice Fatio’s masterpiece, the terraced property includes the six-bedroom main residence, a boat house with a two-bedroom guesthouse, and a two-bedroom beach house accessed by a tunnel under the coastal road.

In his book Maurice Fatio: Palm Beach Architect, Kim I. Mockler describes the house as “one of Fatio’s most exceptional designs and certainly one of his largest,” noting that it took 450 workers eight months to complete the residence. He notes the house's palatial two-story entrance hall, a living room of “baronial dimensions” and walls covered in a fleur-de-lis design copied from an Italian palace.

Clark, who is married to Kristy Hinze-Clark, paid a recorded $11 million for the estate in 1999 and carried out a major restoration and expansion project. The Texas billionaire co-founded Netscape, one of the first commercial web browsers, and more recently created CommandScape, which offers high-tech building-management systems for commercial properties and large residential estates.

With ties to West Virginia, Leo Vecellio heads the Vecellio Group Inc., a family-owned conglomerate that includes energy concerns and road builder Ranger Construction Industries of West Palm Beach. He and his wife are active on Palm Beach’s charitable scene.

High-dollar deals

Moens acted on behalf of the Vecellios when one of their limited liability companies bought the house on Jungle Road for a recorded $25.46 million in February 2014. That property in the Estate Section was listed for sale at the time by agents Paulette Koch and Dana Koch of the Corcoran Group, according to MLS records.

A deed shows the Vecellios in December 2014 transferred ownership of their 1920s-era house into both their names, and they took a homestead exemption on the property. The Mediterranean-style house there has seven bedrooms and just under 18,000 total square feet — all set amid extensive gardens.

RELATED: Jungle Road home sells for $25.46 million

In January 2015, Moens again represented the Vecellio family in a purchase, recorded at about $9.64 million, of a smaller house next door at 695 S. County Road, immediately west of their main residence. Agents Carole Koeppel and John Lloyd of Sotheby's International Realty acted for the seller in that deal.

The Vecellios used an ownership company to buy the next-door house, and in December 2015, the couple joined the two properties under a unity of title as a single address, 120 Jungle Road, courthouse records show.

RELATED: Renovated 1953 house sells for $9.6 million

Simultaneous transactions

Fast forward to this spring. Less than two weeks after Moens withdrew his listing for Il Palmetto, a document signed by the Vecellios and recorded at the courthouse shows they severed their unity of title on Jungle Road. It was recorded April 16.

And on the same day, the county clerk’s office recorded deeds showing simultaneous internal transactions at the Clark and the Vecellio estates.

Clark transferred ownership of Il Palmetto from a trust in his name to a company named Brando Woody DE LLC, a limited liability company registered in Delaware. Delaware’s strict privacy laws cloaked the identity of anyone behind that entity, although later courthouse filings show the company is managed by a West Palm Beach attorney.

In the Vecellios’ case, they transferred ownership of their house at 120 Jungle Road to Delaware-registered Big Sky Property Holdings LLC, according to the deed.

And as every real estate lawyer in Palm Beach knows, the owner of one Delaware limited liability company can sell so-called “membership-interest” shares to another Delaware limited liability company without any record of that transfer necessarily becoming public — or a price being recorded for the transaction. In effect, ownership of that company can completely change hands without any courthouse documentation.

So it’s at least conceivable that Clark sold his membership-interest shares in Brando Woody DE LLC to the Vecellios for an undisclosed amount. And once in control of the company, the Vecellios could have leased the property to themselves using the 99-year lease, with no record of any money changing hands. Brando Woody DE LLC is identified as the Vecellios’ “landlord” on the lease recorded Oct. 23.

About a week earlier, Moens listed the Jungle Road house for sale for its owner, Big Sky Property Holdings LLC, at $29.95 million, MLS shows.

It’s unclear from public records what role — if any — the smaller house at No. 695 has played in any transactions that may have involved the Vecellios and Il Palmetto. The Vecellios still own that property, confirmed John Enck, manager of ownership services at the property appraiser’s office.

Close connections

Buying member-interest shares in a limited liability company is exactly how the Vecellios purchased an oceanfront mansion across town at 589 N. County Road in early 2008, according to trial records in a civil suit filed in 2009 by the couple.

The Vecellios also sold the North County Way house through the same process in 2014, property records indicate. The amount that changed hands four years ago on North County Road was never made public. But sources familiar with the deal have said coffee mogul Robert Stiller and his wife, Christine, paid as much as $55 million for the Vecellios’ property. Moens is said to have acted on behalf of the Vecellios in that sale, opposite Sotheby’s International Realty agent Cristina Condon.

RELATED: 2014 Vecellio's oceanfront mansion sale may have hit $55M

Courthouse records show that Brando Woody DE LLC — the new owner of Il Palmetto — is managed by attorney H. William Perry, CEO and managing shareholder of the Gunster law firm. Perry also managed the limited liability company the Vecellios used in early 2014 to buy the house at 120 Jungle Road, records show. The Vecellios later took ownership in their names from the same company through an internal transfer, according to a courthouse document.

This spring, Perry filed a notice at the county courthouse — recorded on the day after the April ownership transfer at Il Palmetto — that shows the new owner signed a promissory note for a loan in an unspecified amount related to that property. The loan was through United Bank of Virginia, with an address in Morgantown, W. Va. That’s the same bank that issued Brando Woody DE LLC the $69.95 million mortgage on Il Palmetto, recorded Oct. 23.

Perry, who signed the mortgage document on behalf of Brando Woody DE LLC, couldn’t be reached.

Four-year renovation

Hidden from the coastal road by tall hedges, Il Palmetto features a series of pavilions connected by cloisters. The four-year renovation designed by Fairfax and Sammons — with Bridges Marsh & Associates serving as architect of record — rebuilt the original house and added about 30,000 square feet, including a tower, a beach house and a boat house.

Il Palmetto had been on the market for three years before Clark bought it from the estate of the late philanthropist Janet Annenberg Hooker. When the house entered the market two years ago, a Wall Street Journal story said he was selling the property because he and his wife were spending less time on the island.

Leo Vecellio declined comment when approached Thursday by a Daily News reporter at an event at the Preservation Foundation of Palm Beach.